Two New Coal Plants Cancelled In Botswana

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While the battle against coal-generated electricity is progressing nicely in the United States, Europe, South Korea, and even to a certain extent Japan, China, and India, the coal companies in some of those countries continue to have their sights on building more coal plants in Africa. Therefore, it is good news to learn that two Japanese banks, the Japan Bank for International Cooperation (JBIC) and the Nippon Export and Investment Insurance (NEXI), have withdrawn their support to finance two new 150 MW coal plants in Botswana, MorupuleB V and VI. The two coal plants were to be built by the Japanese company, Marubeni, in a joint venture with the South Korean firm, Posco Energy.

Botswana is a large country in southern Africa, 4 times the size of Illinois, with a population of only 2.25 million people. Much of the country is in the Kalahari Desert. All of the 735 MW of nominal capacity in Botswana is coal-generated, but sometimes the electricity generated is only 25% of its rated capacity. This is due to poor construction, lack of maintenance, and corruption from the Chinese company that built the first four 150 MW plants. Coal used to power MorupuleB I, II, III, and IV plants is mined at the nearby Morupule coal mine. Botswana needs 2,648 MW of electricity capacity, so much of it is imported from South Africa (which is having problems generating sufficient electricity for its own needs), Mozambique, and Namibia as part of the South Africa Power Pool.

The Botswana Climate Change Network (BCCN) has been campaigning in tandem with Japanese NGOs to end the financing of the two new Morupule coal plants by Japanese investors. BCCN’s National Coordinator Tracy Sonny said, “This is a great milestone that we have achieved and we will continue working closely with the government on investing in solar.”

Solar, why not? Botswana is supposed “to have the best solar energy in the world,” with an average of 3,200 hours of sunshine per year. Botswana Power Company has just put out tenders for two 50 MW solar farms. This is two-thirds of one of the 150 MW coal power plants that was just canceled. Since Botswana learned that the government should not accept all the risk of energy projects, the developers of these solar farms will have to carry the risks involved.

While the Lamu Coal Power Plant in Kenya was recently canceled due to strong opposition by environmental and local groups, this is not the case in Botswana. While the environmental groups are patting themselves on their backs, the real reason had to do with financial disagreements. As in the Lamu Coal Power Plant, which had to be guaranteed at 85% by the Kenyan government even if the plant was not producing electricity, the Botswana government would have had to guarantee the $800 million for the two plants. In my opinion, this cost seems extremely high for only 300 MW of electricity. Like the Kenyan government, the Botswana government agreed to the guarantee. But when Marubeni added a large upfront payment before the project was completed, the Botswana government canceled the whole project.

This should illustrate how much African countries have to forfeit in order to get development project constructed by large foreign companies. In essence, they are being blackmailed – either agree to the terms of the foreign companies or forget it. Since this is the operating procedure of all these companies, the African countries that want and need large projects have to give in until the requirements become too onerous.

This is another reason why solar would be so beneficial in Botswana and other parts of Africa. Projects can be small scale, sited where needed, and built quickly. High finance and guarantees are then not needed. Botswana’s whole electricity capacity at a modest 2,648 MW could easily be completely covered by solar with battery backup for the evenings. Unfortunately, the cancelation of the two coal power plants was not due to the Botswana government going “green” but to financial issues. Botswana has yet to turn to solar as a significant part of its electricity production.

Featured photo by Jesper Berggreen, from “How Solar Power Finds New Uses In Rural Africa — The Solar Hammer Mill.”

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